How Indian Companies Are Regulated by Law- Company Act, 2013.

The Companies Act, 2013, is the main law that governs how companies are formed, operated, and regulated in India. It replaced the older Companies Act of 1956.
It applies to all companies—whether public or private—and ensures they work in a legal, fair, and transparent manner.

Key Highlights:

• Types of Companies: Defines private, public, one-person, and small companies.
• Company Formation: Lays down rules for registering and setting up a company.
• Corporate Governance: Sets rules for directors, board meetings, and responsibilities.
• Transparency: Requires companies to maintain proper financial records and audits.
• Corporate Social Responsibility (CSR): Big companies must spend part of their profit on social welfare.
• Penalties: Introduces stricter fines for fraud, non-compliance, and mismanagement.
• Investor Protection: Safeguards rights of shareholders and investors.
• Use of Technology: Encourages e-governance, digital filings, and online records.

The Act is very important for anyone running, investing in, or working with companies—ensuring that businesses are accountable, ethical, and legally compliant.

FAQs – Companies Act, 2013

1. What is the Companies Act, 2013?
   It’s the main law that regulates how companies are registered, run, and monitored in India.
2. Which companies does it apply to?
   It applies to all companies in India—private, public, one-person, listed, and unlisted.
3. What is a private company?
   A company with a limited number of shareholders, no public share issue, and restrictions on share transfer.
4. What is a public company?
   A company that can invite the public to invest and has no limit on the number of shareholders.
5. What is a One Person Company (OPC)?
   A company owned by a single person, introduced for small entrepreneurs.
6. What is the minimum number of directors required in a company?
   
   Private company: 2
   Public company: 3
   OPC: 1
7. What is the role of directors under this Act?
   Directors manage company affairs and have fiduciary and legal responsibilities.
8. Is it mandatory to file annual returns?
   Yes. Every company must file annual financials and returns with the Registrar of Companies (RoC).
9. What is Corporate Social Responsibility (CSR)?
   Companies with a net worth of ₹500 crore+ or profits of ₹5 crore+ must spend 2% of profits on social causes.
10. What is the penalty for non-compliance?
    Heavy fines and even imprisonment, depending on the nature of the violation.
11. Do small businesses/start-ups need to follow this law?
    Yes, but there are relaxations for start-ups, small companies, and OPCs.
12. What is the Memorandum of Association (MoA)?
    A company’s founding document stating its name, objectives, and scope of operations.
13. What are the Articles of Association (AoA)?
    The internal rules and regulations for managing a company.
14. How are directors appointed?
    By shareholders during company meetings, or by the board if there's a vacancy.
15. Can a foreign national be a director in an Indian company?
    Yes, as long as they meet the legal and residency requirements.
16. What is ROC compliance?
    Filing necessary forms, documents, and financials with the Registrar of Companies.
17. Are digital signatures required?
    Yes, for directors and professionals to file online documents.
18. What is an AGM, and is it compulsory?
    An Annual General Meeting (AGM) is required for all companies except OPCs.
19. Can a company be shut down easily?
    Companies can close via voluntary winding up, strike-off, or liquidation — but with legal steps involved.
20. Where can I check company details in India?
    On the Ministry of Corporate Affairs (MCA) website: www.mca.gov.in